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In the following matrix for the profits of two dry cleaners with the decision whether or not to offer discounts for regular customers. What do
In the following matrix for the profits of two dry cleaners with the decision whether or not to offer discounts for regular customers. What do expect to happen? Why? Note: they cannot collude
You don't offer discount | You offer discount | |
Rival doesn't offer discount | Rival gets $5000 You get $5000 | Rival gets $3000 You get $6000 |
Rival offers discount | Rival gets $6000 You get $3000 | Rival gets $4000 You get $4000 |
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